Ofgem calls for changes from SSE Orkney link

Ofgem told SSE subsidiary Scottish and Southern Energy Networks that the plans for building a 220MW high voltage link "do not do enough to protect consumers from the risks of paying for a link that is bigger than needed".

To save consumers money on the cost of building the link, Ofgem is seeking to "replicate the outcomes of competition", meaning it will set the revenue that SSEN can earn from building and operating the Orkney link based in part on its experience in cutting the costs of connecting offshore wind.

Ahead of the regulator's has also told SSEN to demonstrate by next December that at least 135MW of new generation on Orkney has either been awarded a Contract for Difference in the government’s 2019 CfD auction or secured planning consent and finance to construct its project.

Ofgem will make a decision on the business case for the Orkney link in spring 2019. It will confirm whether it will use the competition proxy model at the same time.

"All energy consumers pay for the cost of investment in new capacity so the regulator ensures that it obtains the best deal possible for them," it said.

SSEN company asked Ofgem to approve the project on condition that by the end of 2019, 70MW of generation capacity on Orkney committed to use the link once it is built.